Things may be a little shaky for Jay Z and Tidal, but he’s not letting that hold him back in the business world. According to Business Insider, Jay Z has invested in JetSmarter, an app that lets you book private jet flights. This is the second time he’s invested in a jet-related startup.
JetSmarter is being called the Uber of the sky. It works the same way only on a higher level, literally. Uber is one of the most successful startups in history. The video below shows how JetSmarter compares to Uber on three points: convenience, technology and ownership.
So now we know what JetSmarter and Uber have in common. They both: 1) make life easier for travelers; 2) are based on technology; and 3) sell rides on cars/planes that they don’t own. But it’s what is different about the two companies that makes JetSmarter a good investment.
You see, Uber just got a ton of bad press because documents leaked showing that it’s losing money. This makes some people have second thoughts about investing in companies that are “like” Uber. But JetSmarter has an advantage because they don’t have the same costs as Uber.
Uber has to spend money to break into each new market. They offer signing bonuses to new drivers. And they also spend a lot of money fighting lawsuits around the world. Taxi drivers and local governments hate Uber because they steal away customers. Even some Uber drivers have beef with the company. This all happens because Uber needs to add cars to the ground to run their business.
“You raise money, you invest money, you grow (hopefully), you make a profit and that generates a return for investors.” – Uber
JetSmarter does not add any new planes to the sky. They just rent space on the ones that already exist. A big part of their success is that they rent out empty legs. Private jets don’t make money on their way to pick up paying customers. And empty legs make up more than 33% of all private flights. All JetSmarter has to do is partner with flight providers to sell these empty legs to customers that want them. Providers are willing to sell these legs to JetSmarter for as cheap as the price of fuel.
Jetsmarter doesn’t have to pay to break into any new markets because their business is not local-based. Their customers fly from one city or country to another. JetSmarter doesn’t have to offer any signing bonuses to pilots because they aren’t hiring them. And they don’t have any lawsuits from pilots or governments because they aren’t disrupting anything. They’re just making life easier for flight providers and passengers.
Because of these reasons, JetSmarter is able to offer cheaper prices than regular private jet flights. Uber’s prices are anywhere from 1.5 to 2 times as much as cabs. Now JetSmarter does have a $9,000 yearly membership fee. That’s about $750 per month. But many empty leg flights are free to members. If members take one free empty leg flight a month, the fee pays for itself.
JetSmarter also offers a concierge service, same day bookings and departure/arrival from private airports. Classy. With service like that, the Uber of the sky might outgrow that nickname soon.
Do you think Jay Z made a good investment? Could you see yourself using JetSmarter instead of buying a regular plane ticket?